Good reporting from the NYT, as usual. 

Some of my favorite morsels are below, plus my comments.

Link: Music Labels – EMI – New York Times.

NYT:
"Despite costly efforts to build buzz around new talent and thwart
piracy, CD sales have plunged more than 20 percent this year, far
outweighing any gains made by digital sales at iTunes and similar
services. Aram Sinnreich, a media industry consultant at Radar Research
in Los Angeles, said the CD format, introduced in the United States 24
years ago, is in its death throes. “Everyone in the industry thinks of
this Christmas as the last big holiday season for CD sales,” Mr.
Sinnreich said, “and then everything goes kaput…”

Gerd says: guess there IS hope: once the pain is big enough, changing
seems like a real option, all of a sudden – that is what we are seeing
now. Maybe this ship really has to be steered into the cliffs first,
after all?  Call me an optimist but I used to think there were
other options ;). My 2 cents: if you have the guts CHANGE NOW, you can
still own a good chunk of the market, and prosper.  But: band-aids are
over – it’s time for real, hard-core changes. Drop copy-protection (at
least for now – until something can be used that is of super-value to
the USER!), tell the users, fans & artists that you screwed up, go
for flexible pricing and bundles, package music into other media, offer
agency-type deals to artists, become completely transparent and drop
the ‘secret sauce’ antics, and start using syndication as the prime
vehicle of promotion, marketing and distribution. It’s not the COPY – it’s the ACCESS. It’s not Prevention – it’s Participation.

NYT: "For the companies that choose to plow ahead, the question is how to
weather the worsening storm. One answer: diversify into businesses that
do not rely directly on CD sales or downloads. The biggest one is music
publishing, which represents songwriters (who may or may not also be
performers) and earns money when their songs are used in TV
commercials, video games or other media…"

Gerd says: ok, now, I have talked about this until the cows came
home, but here is again: switch to music as a service. Again: never
mind the copies – the next big thing is offering ACCESS. Brands.
Experiences. Added Values. Stuff that only you can provide – together
with the artists. Values and experiences can’t just be downloaded.

Picture_3_2
NYT: "But very few albums have gained traction. And that is compounded by the
industry’s core structural problem: Its main product is widely
available free. More than half of all music acquired by fans last year
came from unpaid sources including Internet file sharing and CD
burning, according to the market research company NPD Group. The
“social” ripping and burning of CDs among friends — which takes place
offline and almost entirely out of reach of industry policing efforts —
accounted for 37 percent of all music consumption, more than
file-sharing, NPD said…."

Gerd says: sounds like an obvious problem – it’s all out there for
free so they stopped buying. But the thing is that this is not the real
problem. ‘Free distribution’ is a blessing not a curse, and P2P /
Super-Dustribution will emerge as the main mechanism for digital
distribution in the next 3 years (and not just for music). Rather, it
is – still seriously counter-assumptive, and beyond grasp of
most of the incumbents of ‘music1.0’ – the unfailing desire to, at any
cost (including self-destruction), want to control the ecosystem that
the large music companies must keep in check – and then we can understand and monetize what people actually do
with technology. They are doing this because they like the music and
the artists, not because they want to  do as much damage as they can –
YOU simply have not given them good enough options to act differently.

If the model of uber-control over music distribution isn’t working
any longer, wouldn’t it make sense to try to come up with a new model?
Lesser control does not mean zero revenues. There is life after selling
expensive copies of plastic, or indeed of 0s and 1s. Trust me.

We Welcome Your Comments

Comments

18 replies
  1. Marc Cohen says:

    Gerd has interesting ideas but I don’t see a clear business model. Regardles of the format, CD or downloaded, recorded music must exist in a format that can be stolen. How do you put the suggested “experiences” in a physical format and how do you prevent the “experiences” from being pirated as well?

  2. Marc Cohen says:

    Gerd has interesting ideas but I don’t see a clear business model. Regardles of the format, CD or downloaded, recorded music must exist in a format that can be stolen. How do you put the suggested “experiences” in a physical format and how do you prevent the “experiences” from being pirated as well?

  3. Julian Bond says:

    Now they’ve successfully cut off AllOfMp3’s income, they could do worse than simply copy the model. Or somebody like Amazon could just buy the entire code base and data.

    I’m still convinced there is a market for downloads as long as the price is right. because there is a cut off point where ease of use trumps free.

  4. Julian Bond says:

    Now they’ve successfully cut off AllOfMp3’s income, they could do worse than simply copy the model. Or somebody like Amazon could just buy the entire code base and data.

    I’m still convinced there is a market for downloads as long as the price is right. because there is a cut off point where ease of use trumps free.

  5. Conducting a Competitive Intelligence Project says:

    EMI new business model – My results part 3

    So here are this weeks results generated by my sources. Thank you bloglines 1. Interesting Business model – Electronic distribution and expanding into the huge emerging Chinese marketIODA which is an independent digital music distributor based in San …

  6. Conducting a Competitive Intelligence Project says:

    EMI new business model – My results part 3

    So here are this weeks results generated by my sources. Thank you bloglines 1. Interesting Business model – Electronic distribution and expanding into the huge emerging Chinese marketIODA which is an independent digital music distributor based in San …

  7. Conducting a Competitive Intelligence Project says:

    EMI new business model – My results part 3

    So here are this weeks results generated by my sources. Thank you bloglines 1. Interesting Business model – Electronic distribution and expanding into the huge emerging Chinese marketIODA which is an independent digital music distributor based in San …

  8. Tim says:

    People will buy music, they’ll buy CD’s because they want the hard copy, but these days they reserve those purchases for something that truly is important/unique/exciting in other words.. GOOD MUSIC. Gone are the days where someone will buy a whole cd because they heard a song on the radio and its time to face up to that. They’ll check out the one song they heard first online and maybe then whole record (on mp3) first from a friend or file sharing. If the music good enough that they feel they cant live without it they’ll buy the cd. I know that i want to support certain artists because they deserve it and they make great art. The music companies should stop trying to re invent the wheel in terms of copyright protection and maybe focus on what they should have focused on all along and that is the quality of music… of course thats laughable.. but it’s really the only way.

  9. Tim says:

    People will buy music, they’ll buy CD’s because they want the hard copy, but these days they reserve those purchases for something that truly is important/unique/exciting in other words.. GOOD MUSIC. Gone are the days where someone will buy a whole cd because they heard a song on the radio and its time to face up to that. They’ll check out the one song they heard first online and maybe then whole record (on mp3) first from a friend or file sharing. If the music good enough that they feel they cant live without it they’ll buy the cd. I know that i want to support certain artists because they deserve it and they make great art. The music companies should stop trying to re invent the wheel in terms of copyright protection and maybe focus on what they should have focused on all along and that is the quality of music… of course thats laughable.. but it’s really the only way.

  10. Tim says:

    People will buy music, they’ll buy CD’s because they want the hard copy, but these days they reserve those purchases for something that truly is important/unique/exciting in other words.. GOOD MUSIC. Gone are the days where someone will buy a whole cd because they heard a song on the radio and its time to face up to that. They’ll check out the one song they heard first online and maybe then whole record (on mp3) first from a friend or file sharing. If the music good enough that they feel they cant live without it they’ll buy the cd. I know that i want to support certain artists because they deserve it and they make great art. The music companies should stop trying to re invent the wheel in terms of copyright protection and maybe focus on what they should have focused on all along and that is the quality of music… of course thats laughable.. but it’s really the only way.

  11. Dan Gross says:

    First off, allofmp3.com and its friends are alive and well under other domain names that are all over the place. You have to remember that each time you catch one of these moles, 5 more spring up. There is no way to successfully restrict the inherent capacities of the CD as a non-restricted tool for distribution–it will be copied and burned as long as it exists! Secondly, I think the death of the CD is great 🙂 We can now look at pulling back the reigns on the runaway music business that has been ‘stealing’ from the artists’ and consumers’ pockets for years. The new model will focus on the personal interaction that brings utility to the consumer, and the packaged good will be recognized as a promotional tool. As the home theater morphs into the home computer, owning music will still be important, except you’ll have access to whatever you want whenever you want under the music like water consumption model. That was a mouthful…

  12. Dan Gross says:

    First off, allofmp3.com and its friends are alive and well under other domain names that are all over the place. You have to remember that each time you catch one of these moles, 5 more spring up. There is no way to successfully restrict the inherent capacities of the CD as a non-restricted tool for distribution–it will be copied and burned as long as it exists! Secondly, I think the death of the CD is great 🙂 We can now look at pulling back the reigns on the runaway music business that has been ‘stealing’ from the artists’ and consumers’ pockets for years. The new model will focus on the personal interaction that brings utility to the consumer, and the packaged good will be recognized as a promotional tool. As the home theater morphs into the home computer, owning music will still be important, except you’ll have access to whatever you want whenever you want under the music like water consumption model. That was a mouthful…

  13. Dan Gross says:

    First off, allofmp3.com and its friends are alive and well under other domain names that are all over the place. You have to remember that each time you catch one of these moles, 5 more spring up. There is no way to successfully restrict the inherent capacities of the CD as a non-restricted tool for distribution–it will be copied and burned as long as it exists! Secondly, I think the death of the CD is great 🙂 We can now look at pulling back the reigns on the runaway music business that has been ‘stealing’ from the artists’ and consumers’ pockets for years. The new model will focus on the personal interaction that brings utility to the consumer, and the packaged good will be recognized as a promotional tool. As the home theater morphs into the home computer, owning music will still be important, except you’ll have access to whatever you want whenever you want under the music like water consumption model. That was a mouthful…

  14. Bangla Song says:

    Sounds pretty good. Anyway, in east russian language we call it moosika (music). Sounds funny little bit, isn’t it? When people dies in village, they used to sing such sort of songs. Interesting. right?

  15. Bangla Song says:

    Sounds pretty good. Anyway, in east russian language we call it moosika (music). Sounds funny little bit, isn’t it? When people dies in village, they used to sing such sort of songs. Interesting. right?

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